The Supreme Court on Aug. 30 will take up pleas filed by Vodafone Idea, Bharti Airtel, and various other telcos, seeking a limited reconsideration of a 2019 top court judgement that held India’s telecom operators will have to include non-core revenues to calculate their adjusted gross revenue.
Telecom operators have filed the curative petition based on the premise that the Department of Telecommunications has committed a grave error in the calculation of the AGR dues, coupled with an arbitrary penalty imposed by the top court.
The curative plea will be taken up by a three-judge bench led by the Chief Justice of India, DY Chandrachud.
Notably, it will not be an open court hearing, meaning that the hearing will not be open to the public. The matter will be taken up in the chambers of the CJI at 1:30 pm.
What Is The AGR Dues Case All About?
Adjusted gross revenue, or AGR, is the basis for a revenue sharing mechanism between the government and the telecom operators.
Under this mechanism, the operators have to pay a certain licensing fee and spectrum usage fee to the Department of Telecommunications. The DoT calculates the fee as a percentage of the AGR. However, the definition of what constitutes AGR has been a pain point since 2005.
The telecom operators argued before various judicial forums that the definition should only include their core revenue, while the department argued that the definition should include all revenue, including revenue from non-telecom services.
In October 2019, the Supreme Court ruled that non-core revenue must be included while calculating the AGR, ending a 14-year-long legal battle between mobile operators and the government on the definition of AGR.
Fallout Of The AGR Judgment
The 2019 judgement dealt a crippling blow to the bruised industry that stared at dues and penalties worth thousands of crores. It had increased the liabilities of Bharti Airtel and Vodafone Idea to more than Rs 90,000 crore.
Soon after, the companies approached the court, seeking more time for payment of their dues. In September 2020, the apex court allowed for the payment of dues over 10 years.
In a separate plea in 2021, the top court dismissed the applications filed by telecom companies that sought permission to approach the DoT on the calculation of the dues in the case, claiming arithmetic errors in the department’s calculation of the dues.
In the aftermath of the AGR judgement, the government initially owned a 33% stake in Vodafone Idea, which now stands reduced at 23%. The shares were allocated to the government in lieu of the conversion of interest dues arising from the deferment of adjusted gross revenue and spectrum auction payments.
AGR Case: Supreme Court Committed ‘Serious’ Jurisdiction Errors, Says Vodafone Idea. Read more on Business News by NDTV Profit.